A comparison of sales response predictions from demand models applied to store-level versus panel data

In order to generate sales promotion response predictions, marketing analysts estimate demand models using either disaggregated (consumer-level) or aggregated (store-level) scanner data. Comparison of predictions from these demand models is complicated by the fact that models may accommodate different forms of consumer heterogeneity depending on the level of data aggregation. This study shows via simulation that demand models with various heterogeneity specifications do not produce more accurate sales response predictions than a homogeneous demand model applied to store-level data, with one major exception: a random coefficients model designed to capture within-store heterogeneity using store-level data produced significantly more accurate sales response predictions (as well as better fit) compared to other model specifications. An empirical application to the paper towel product category adds additional insights. This article has supplementary material online.

Cross-category demand effects of price promotions

Do promotions in a certain category lead to higher revenues in other categories? If so, to what degree? The answers to these questions are highly relevant for retailers that supply products in different categories. Empirical findings in studies that consider a limited number of categories indicate small promotional cross-category effects. This study develops a framework to determine the impact of price promotions on category revenues that include interdependencies among a substantial number of categories at the category demand level. The own- and cross-category demand effects are moderated by variables such as promotion intensity, category characteristics (own-category effects), and spatial distances between shelf locations (cross-category effects). The empirical results based on daily store-level scanner data show that approximately half of all price promotions expand own-category revenues, especially for categories with deeper supported discounts. There is a high probability (61%) that a price promotion affects sales of at least one other category. The number of categories affected is not greater than two. Moderate evidence supports the existence of cross-promotional effects between categories more closely located in a store.

Estimating the SCAN*PRO model of store sales: HB, FM or just OLS?

In this paper we investigate whether consideration of store-level heterogeneity in marketing mix effects improves the accuracy of the marketing mix elasticities, fit, and forecasting accuracy of the widely-applied SCAN*PRO model of store sales. Models with continuous and discrete representations of heterogeneity, estimated using hierarchical Bayes (HB) and finite mixture (FM) techniques, respectively, are empirically compared to the original model, which does not account for store-level heterogeneity in marketing mix effects, and is estimated using ordinary least squares (OLS). The empirical comparisons are conducted in two contexts: Dutch store-level scanner data for the shampoo product category, and an extensive simulation experiment. The simulation investigates how between- and within-segment variance in marketing mix effects, error variance, the number of weeks of data, and the number of stores impact the accuracy of marketing mix elasticities, model fit, and forecasting accuracy. Contrary to expectations, accommodating store-level heterogeneity does not improve the accuracy of marketing mix elasticities relative to the homogeneous SCAN*PRO model, suggesting that little may be lost by employing the original homogeneous SCAN*PRO model estimated using ordinary least squares. Improvements in fit and forecasting accuracy are also fairly modest. We pursue an explanation for this result since research in other contexts has shown clear advantages from assuming some type of heterogeneity in market response models. In an Afterthought section, we comment on the controversial nature of our result, distinguishing factors inherent to household-level data and associated models vs. general store-level data and associated models vs. the unique SCAN*PRO model specification.

Reduced gray matter volume in ventral prefrontal cortex but not amygdala in bipolar disorder:significant effects of gender and trait anxiety

Neuroimaging studies in bipolar disorder report gray matter volume (GMV) abnormalities in neural regions implicated in emotion regulation. This includes a reduction in ventral/orbital medial prefrontal cortex (OMPFC) GMV and, inconsistently, increases in amygdala GMV. We aimed to examine OMPFC and amygdala GMV in bipolar disorder type 1 patients (BPI) versus healthy control participants (HC), and the potential confounding effects of gender, clinical and illness history variables and psychotropic medication upon any group differences that were demonstrated in OMPFC and amygdala GMV. Images were acquired from 27 BPI (17 euthymic, 10 depressed) and 28 age- and gender-matched HC in a 3T Siemens scanner. Data were analyzed with SPM5 using voxel-based morphometry (VBM) to assess main effects of diagnostic group and gender upon whole brain (WB) GMV. Post-hoc analyses were subsequently performed using SPSS to examine the extent to which clinical and illness history variables and psychotropic medication contributed to GMV abnormalities in BPI in a priori and non-a priori regions has demonstrated by the above VBM analyses. BPI showed reduced GMV in bilateral posteromedial rectal gyrus (PMRG), but no abnormalities in amygdala GMV. BPI also showed reduced GMV in two non-a priori regions: left parahippocampal gyrus and left putamen. For left PMRG GMV, there was a significant group by gender by trait anxiety interaction. GMV was significantly reduced in male low-trait anxiety BPI versus male low-trait anxiety HC, and in high- versus low-trait anxiety male BPI. Our results show that in BPI there were significant effects of gender and trait-anxiety, with male BPI and those high in trait-anxiety showing reduced left PMRG GMV. PMRG is part of medial prefrontal network implicated in visceromotor and emotion regulation.